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TALLAHASEE, Florida – Credit Union 24 has withdrawn from the controversial purchase offer it received from Concord EFS, a for-profit firm based in Memphis, Tennessee. “More than 60 days have expired from the date of the letter of intent between Credit Union 24, Incorporated and Concord without a definitive agreement,” CU24 said. “In light of this, as well as other considerations, the Board of Directors of Credit Union 24 has concluded that it is in the best interest of the Company to terminate the letter of intent with Concord EFS, Inc. Further, it has determined to suspend all negotiations for the sale or merger of the Credit Union 24 Network at this time,” the organization added. Concord had signed a letter of intent with CU24 in mid January to buy the Florida based ATM network. No firm figures on what Concord offered were ever released, but sources familiar with the offer placed the amount at roughly $30 million. Although the letter of intent had expired, CU24 CEO Jim Park said that the firms had continued negotiating past the deadline. Mary Warren, Vice President of Marketing for CU24, said the recent rumors about Concord putting itself up for sale, as well as Wall Street analysts questioning the company’s ability to keep its largest institutional customers, had not played a critical role in the decision. “I think the sense of the Board was that we had just been involved in this for the 60 days and it was time to get back to business,” Warren said. Park had previously reported the Board would wait to hear a confirmation or denial from Concord about the sale rumor before it would take up the question of what to do about the purchase offer. Concord had neither confirmed nor denied the sale rumors to CU24, Warren said. Rumors have swirled about a possible Concord sale after a news service reported that the firm was preparing for just such a sale. Concord has declined to comment on the sale story. Warren said the firm did not feel betrayed or slighted by Concord, even though as part of the sale support effort, both firms reassured member credit unions about Concord’s stability and profitability into the future. “These things happen in the EFT world all the time,” Warren said. “It’s impossible to know ahead of time what will happen and situations can change very quickly.” She also noted that the firm had not yet held a meeting to review the purchase experience and could not say what, if anything, the firm would have done differently if they had to do it over again. She could not say whether the firm would have used the same consultants, or others, to evaluate offers should the network come up for sale again. “The board hasn’t met to discuss that,” she said. “We are focused on getting back to business as usual.” Warren did point out that the firm considered itself well-served by its consultants – New-Jersey based Carmody and Bloom – and that given the size of the CU24 staff, using consultants for such a large job was probably inevitable. “Credit Union 24 runs pretty lean,” Warren observed. “There aren’t a lot of people who have the time to evaluate such big offers.” Mark Starr, CEO of the $179 million Florida Credit Union, based in Gainsville, pointed out that the current instability rumored at Concord reinforced his point that it was very important for credit unions to keep control of their EFT networks. Starr, whose credit union is one of the member shareholders in CU24, wrote the other shareholders about his concerns about the pending sale urging that they think twice before committing to it. “I think Credit Union 24 dodged a bullet,” Starr noted. Stan Paur, President of the PULSE EFT Association, based in Houston, Texas, said he expected that the stories about Concord being put up for sale are likely correct and that observers should not be fooled by the lack of obvious buyers. “There are always institutions that look at the EFT industry and see the money making potential and want to get into it,” he said. Paur, whose Association has both banks and credit union members, estimated that Concord had not been prepared for how quickly EFT services had become a financial commodity more than a tailored service or for how competitive the industry would become as that commodification moved forward. He also said that, among financial institutions, owning networks still means something and the firm may have underestimated what it would take to pull financial institutions away from other industry-based network opportunities. Paur confirmed that PULSE was still interested in merging with CU24 and would be open to hearing from the network, once the dust has settled a bit he said. CO-OP Network, the credit union owned ATM network based in Ontario, California is also still interested, but signaled this week that it was in no hurry either. “There’s still a lot of dust that needs to settle in this situation,” said CO-OP Network Gene Polito, President for EFT Services for CO-OP. “CU24 needs to take some time to evaluate the situation and to determine what works best for their network and shareholders. As for CO-OP Network, we’re going to maintain the same position we’ve taken from the outset, which is to let the due process run its course.” But Warren said that CU24 would focus for the immediate future on getting back to serving its members. “We are in a very strong position, we have had one of the strongest years on record and we have plenty of work to do getting back to business,” Warren said. The firm’s management would hold a meeting next week to set the organization’s non-merger related near term priorities, she said. [email protected]

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